1/3 In finance, the sum of ALL transactions must BALANCE.

This doesn’t mean our trade should balance, or that our net investments should zero out. Indeed, national welfare is generally best served when trade and net investments are imbalanced.

Original post: https://bsky.app/profile/did:plc:wutxdifahkiof54ukaktuuq5/post/3m7i4fanfok2s https://cdn.nostrcheck.me/b34263985690351997cde5d6e894220037d401264bd60285a5bdb474cef4ac5b/0eed08e25c8a5db3e598937124c3c04c506febf6784e958413a72dac20588339.webp

Reply to this note

Please Login to reply.

Discussion

2/3 That said, consider what might happen to a county’s external when a country drastically reduces imports.

Imports Chg=Big Neg

Minus Exports Chg=?

Minus Services=?

Minus Investments=?*

———————-

Net External = Zero

*Includes Cash Flow